Tapinator, Inc.: Tapinator Announces 2022 Annual and Fourth Quarter Results

- Revenue Decreases 5% Year-Over- Year to $5.5 Million
- Bookings^* Decrease 20% Year-Over-Year to $5.4 Million
- Net Income Decreases 57% Year-Over-Year to $285k
- Adjusted EBITDA^* Decreases 22% Year-Over-Year to $1.3 Million
- Basic and Fully Diluted EPS of $0.10

NEW YORK, March 3, 2023 /PRNewswire/ -- Tapinator, Inc. (OTC: TAPM) ("Tapinator," the "Company," "we," "our" or "us"), a developer and publisher of category leading games for mobile platforms today announced unaudited financial results for the period ended December 31, 2022, and the filing of its annual report for the years ended December 31, 2022 and 2021.

The annual report and financial statements have been published on OTC Markets and may be found at http://www.otcmarkets.com/stock/TAPM/disclosure. The results provided below replace, in their entirety, any guidance or projections previously issued by the Company.

For the year ended December 31, 2022, Tapinator achieved revenue of approximately $5.5 million, bookings^* of approximately $5.4 million, net income of approximately $285,000 and adjusted EBITDA^* of approximately $1.3 million . The Company's annual revenue, bookings^*, net income and adjusted EBITDA^* represent year-over-year declines of 5%, 20%, 57% and 22%, respectively. For the full year, the Company also announced basic and fully diluted net income per share of $0.10 .

For the three months ended December 31, 2022, Tapinator achieved revenue of approximately $1.2 million, bookings^* of approximately $1.1 million, net loss of approximately $592,000 and adjusted EBITDA^* of approximately $270,000 . The Company's quarterly revenue, bookings and adjusted EBITDA^* represent year-over-year declines of 31%, 48%, and 54%, respectively. For the quarter, the Company also announced basic and fully diluted net loss per share of ($0.22) per share.

^*A table has been included in this press release with non-GAAP adjustments to the Company's revenue resulting in bookings (a non-GAAP measure) and non-GAAP adjustments to the Company's net loss, resulting in adjusted EBITDA (a non-GAAP measure) for the relevant periods.

Financial Highlights

	Quarter Ended				Year Ended
	December 31				December 31
	2022	2021	% Ch.		2022	2021	% Ch.
GAAP Results:
Revenue	$1,153,179	$1,678,800	-31 %		$5,536,328	$5,840,124	-5 %
Operating Income (Loss)	($96,028)	$176,927	NM(1)		$521,819	$884,620	-41 %
Net Income (Loss)	($591,821)	($316,203)	NM(1)		$285,267	$665,580	-57 %
Net Income (Loss) margin %	-51 %	-19 %			5 %	11 %
Net Income (Loss) Per Share - Basic	($0.22)	($0.11)	96 %		$0.10	$0.24	-58 %
Net Income (Loss) Per Share - Diluted	($0.22)	($0.11)	96 %		$0.10	$0.23	-57 %
Weighted avg. common shares outstanding - basic	2,725,439	2,824,810			2,802,109	2,801,440
Weighted avg. common shares outstanding - diluted	2,726,105	2,824,810			2,869,878	2,936,925
Non-GAAP Results:
Bookings:
Category Leading Games	$1,092,976	$1,356,357	-19 %		$4,735,486	$4,874,534	-3 %
Rapid-Launch Games	26,429	139,539	-81 %		359,811	683,640	-47 %
NFT Publishing	28,192	707,393	-96 %		258,246	1,158,005	-78 %
Total Bookings	$1,147,597	$2,203,289	-48 %		$5,353,542	$6,716,179	-20 %
Adjusted EBITDA	$269,580	$589,501	-54 %		$1,259,827	$1,625,196	-22 %
Adjusted EBITDA Margin %	23 %	35 %			23 %	28 %
(1) Percentage change not meaningful.

Ilya Nikolayev, CEO of Tapinator commented, "In 2022, we saw various macro challenges, including an industry-wide contraction for mobile gaming and a NFT bear market. In these challenging times, we believe that it is especially important to stay the course and continue executing on our product roadmap as well as operate the business in a profitable, efficient manner. We have done both and believe that we will see positive momentum from our efforts in 2023.

In terms of existing products, we made numerous improvements to Video Poker Classic, Lucky Lotto and Crypto Trillionaire. These include expanding our live ops systems, adding re-engagement mechanisms for lapsed players, implementing deep and universal linking, improving customizability of our offer system, improving late-stage game balancing and many other product initiatives. In terms of game-wide infrastructure, we have started building out our email systems. Additionally, we have increased our investment in game marketing.

In terms of new products, we launched Keno Vegas in February of 2022 and, in November of 2022, we added "Live Keno" functionality to the game. We are now seeing promising results in terms of the key engagement and monetization metrics that we look at, including retention and ARPDAU. We plan to be aggressive this year in terms of continuing to update the game with the goal of meeting and perhaps exceeding the metrics that we are seeing with our core product, Video Poker Classic.

Overall, despite any macro-economic challenges, we will continue to be heads-down executing on our products and, we believe, will see positive results from these efforts, especially as it relates to our Keno Vegas game, in 2023."

Non-GAAP Financial Measures*We have provided in this release the non-GAAP financial measures of Bookings and adjusted EBITDA as a supplement to the measures of Revenue and Operating which are prepared in accordance with United States generally accepted accounting principles ("GAAP"). Management uses Bookings and adjusted EBITDA internally in analyzing our financial results to assess operational performance and liquidity. The presentation of Bookings and adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. We believe that both management and investors benefit from referring to Bookings and adjusted EBITDA in assessing our performance and when planning, forecasting, and analyzing future periods. We believe Bookings and adjusted EBITDA are useful to investors because it allows for greater transparency with respect to key financial metrics we use in making operating decisions and because our investors and analysts use them to help assess the health of our business. Below, we have provided reconciliations between our historical Bookings and adjusted EBITDA to the most directly comparable GAAP financial measures. Some limitations of Bookings and adjusted EBITDA are as follows:

• Bookings do not reflect that we defer and recognize online game revenue over the estimated life of durable virtual goods;
• Adjusted EBITDA does not include the impact of stock-based expense, impairment of previously capitalized software or intangible assets previously acquired, acquisition-related transaction expenses, one-time financing expenses, contingent consideration fair value adjustments, share settlement expense, and restructuring expense;
• Adjusted EBITDA does not reflect income tax expense;
• Adjusted EBITDA does not include other income or expenses, which includes foreign exchange gains and losses, interest income or expense, and gain on extinguishment of debt;
• Adjusted EBITDA excludes depreciation and amortization of intangible assets and impairment of capitalized software. Although depreciation, amortization, and impairment of capitalized software are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future; and
• Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which will reduce their usefulness as a comparative measure.

Because of these limitations, you should consider Bookings and adjusted EBITDA, along with other financial performance measures, including Revenue, Net Income (Loss), Basic and Diluted Net Income (Loss) Per Share, Cash Flow from Operations, Operating Income (Loss), and our other financial results presented in accordance with GAAP.

NFT500 Supplemental Information - Summary Collection Metrics

	Totals as of 12/31/2021	Q1-Q4 2022	Cumulative Totals as of 12/31/2022
# of NFTs Collected	360	221	581
# of NFTs Sold	-9	-45	-54
# of NFTs Held, Cumulatively	351	527	527
Cost of NFTs Collected	$ 1,198,761	$ 1,466,684	$ 2,665,445
Proceeds from Sale of Collected NFTs	(179,028)	$ (1,012,326)	(1,191,354)
Proceeds from Sale of Digital Asset Dividends & Airdrops	-	(185,816)	(185,816)
Cost of NFTs Collected, Net of Sales Proceeds	$ 1,019,733	$ 268,542	$ 1,288,275

Reconciliation of GAAP to Non-GAAP Results

	Quarter Ended				Year Ended
	December 31				December 31
	2022	2021			2022	2021
Reconciliation of Revenue to Bookings:
Revenue	$1,153,179	$1,678,800			$5,536,328	$5,840,124
Change in deferred revenue	(5,582)	524,489			(182,786)	876,055
Bookings	$1,147,597	$2,203,289			$5,353,542	$6,716,179
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
Net income (loss)	($591,821)	($316,203)			$285,267	$665,580
Interest expense, net	0	131,560			(322)	2,554
Impairment of capitalized software	143,805	271,917			143,805	271,917
Share settlement agreement, non-recurring	0	0			0	93,555
Amortization of capitalized software development	120,485	101,849			367,959	366,005
Gain on digital asset dividends & airdrops	0	0			(145,681)	0
Gain on extinguishment of debt	0	0			0	(109,231)
Depreciation and amortization of other assets	3,212	2,881			13,892	5,871
Impairment of digital assets	578,811	402,099			1,031,656	407,943
Realized gains on sale of digital assets	(8,113)	(32,519)			(569,104)	(167,770)
Realized gains on sale of investments	0	(8,010)			(5,091)	(8,010)
Stock-based expense	23,201	35,927			137,446	96,782
Adjusted EBITDA	$269,580	$589,501			$1,259,827	$1,625,196

About Tapinator
Tapinator Inc. (OTC: TAPM) develops and publishes category leading games for mobile platforms. Tapinator's library includes more than 300 titles that, collectively, have achieved over 500 million mobile downloads, including notable properties such as Video Poker Classic, Crypto Trillionaire and Keno Vegas . Through our NFT500 platform, we have amassed a significant collection of fine art NFT's. We generate revenues from our mobile games via consumer transactions, including in-app purchases and subscriptions, and through the sale of branded advertisements. Founded in 2013, we are headquartered in New York, with product teams located in North America and Europe .

Forward Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts regarding Tapinator, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "goal," "seek," "plan," "feel," "opinion," "may," "will," "expect," "anticipate," "estimate," "intend," "target," and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, among other things, our belief that continuing to execute on our product roadmap as well as operate the business in a profitable, efficient manner will see positive results in 2023, our plan to be aggressive this year in terms of continuing to update Keno Vegas with the goal of meeting and perhaps exceeding the metrics that we are seeing with our core product, Video Poker Classic, and our belief we will see positive results from continuing to be heads-down executing on our products, especially as it relates to our Keno Vegas game, in 2023. . Forward-looking statements are subject to risks and uncertainties that could cause our future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Except as required by law, Tapinator undertakes no obligation to update or revise any forward-looking statements. The quoting and trading of the Company's common stock on the OTC Marketplace is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with the Company's operations or business prospects. As a result, there may be volatility in the market price of the shares of the Company's common stock for reasons unrelated to operating performance. Moreover, the OTC Marketplace is not a stock exchange, and trading of securities on it is often more sporadic than trading of securities listed on a national securities exchange. Accordingly, stockholders may have difficulty reselling any of their shares. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company, please see the Company's Supplemental Information Report as filed with the OTC Markets on October 20, 2021 and as updated from time to time.

CONTACT:
Tapinator Investor Relations
[email protected]
914.930.6232

SOURCE Tapinator, Inc.